Top China VC deals 2022: EV maker Aion raises $2.6bn in largest round

The Series A round is also the largest VC financing in APAC this year
Despite a 39% year-on-year drop in the number of venture capital deals in China this year, billion-dollar deals are still being completed in policy-aligned sectors. Such areas include renewable energy or sustainability-linked fields. Electric vehicle (EV) manufacturers and battery makers continue to feature prominently in the largest completed deals, as well as solar panel makers.

Top three venture capital deals in China, 2022 YTD

1. Aion ($2.57bn). Most recently, Chinese state-owned EV manufacturer Aion raised $2.57bn in a Series A round. This was led by Shenzhen Capital Group, Guangdong Technology Financial Group, and other investors, achieving a post-money valuation of over $14bn. Its Aion S, an electric sedan car and the company’s first EV, was the 10th best-selling electric vehicle in China in 2021. The company has plans to launch two electric models each year and make all its models electric.
2. Daqo New Energy ($1.64bn). In a private investment in public equity (PIPE) deal backed by UBS, Shenzhen Capital Group, China Pacific Life Insurance, and other investors, Daqo New Energy raised $1.64bn. The company manufactures chemicals for building solar photovoltaic systems. The capital raised will be used to expand production in Baotou City, Inner Mongolia, China. 
3. Sunwoda EVB ($1.17bn). Sunwoda EVB raised $1.17bn from a group of investors including Shenzen Capital Group, Source Code Capital, Broad Vision Funds, and National Green Development Fund Management. It manufactures EV batteries and is expected to go public next year. 

Notably, the largest rounds of venture financing are now raised largely from domestic PE firms, state agencies and funds, as well as other financial institutions. Only a handful of foreign players participated in these large rounds, such as Zurich-headquartered UBS, while others have scaled down the size of their investments in China. 

With China targeting 40% of all automobiles sold in the country to be electric by 2030, venture capital will remain part of Beijing’s toolset to propel growth in the EV sector, alongside subsidies to promote vehicle sales and preferential regulations. Government support has helped to direct capital to newer EV companies like Aion, as well as battery makers, AI software providers, and other manufacturers that are part of the EV supply chain. 

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